Reserve Bank of India: The RBI Governor also emphasized that in such circumstances, monetary policy will have to be actively deflationary. Any change in policy stance would be premature and risky.
Food Inflation News: Amidst the fluctuating environment of food product prices, there is concern about inflation. Reserve Bank of India (RBI) Governor Shaktikanta Das said this during the MPC meeting recently. The meeting of the six-member MPC chaired by Governor Das was held between 6 and 8 December. Citing concerns related to inflation, it was unanimously decided in the meeting to keep the repo rate at 6.5 percent. Information related to the meeting has now been released.
Estimate of impact on inflation
During this, the Governor said, ‘Inflation is expected to be affected due to unstable and uncertain food prices and seasonal changes coming at regular intervals.’ He said that there is a possibility of inflation increasing due to vegetables becoming expensive again. Das said, ‘We have to be more alert to any sign of rapid increase in inflation. Even the slightest carelessness can derail the process of bringing down inflation.
Need to give more importance to inflation
The RBI Governor also emphasized that in such circumstances the monetary policy will have to be actively deflationary. Any change in policy stance would be premature and risky. Deputy Governor and MPC member Michael Devvrat Patra said that monetary policy will have to be very cautious. While voting in favor of maintaining the policy rate at the old level, he said that there is a need to give more importance to inflation than the increase in MPC.
RBI Executive Director and MPC member Rajiv Ranjan said that the economy is running at full speed and growth has performed surprisingly well. He also stressed that the best way to support this growth path is to maintain our commitment to price stability. Shashank Bhide, Ashima Goyal and Jayant R Verma, the three members appointed by the government in MPC, also agreed to keep the repo rate at the old level.
